What will be the biggest challenges for HealthTech and MedTech companies selling in to the NHS in 2026?'
- Nelson Advisors
- Dec 31, 2025
- 15 min read
Navigating the 2026 NHS Market for HealthTech and MedTech
The landscape for HealthTech and MedTech companies operating within the United Kingdom is currently undergoing a structural metamorphosis. As the National Health Service (NHS) transitions from a phase of post-pandemic recovery into a period of radical, mission-led reform underpinned by the 10-Year Health Plan, the year 2026 emerges as a pivotal juncture. For suppliers, this period represents the convergence of revised regulatory frameworks, a new financial operating model for Integrated Care Boards (ICBs) and a shift toward value-based procurement that fundamentally alters the criteria for market success.
The challenges are not merely transactional but are rooted in systemic shifts from hospital-based to community-based care, from analogue to digital delivery and from sickness to prevention. Organisations that fail to align their value propositions with these three strategic pillars risk exclusion from a consolidating and increasingly sophisticated procurement ecosystem.
The complexity of the 2026 environment is exacerbated by the simultaneous implementation of the Procurement Act 2023, the full activation of the Federated Data Platform (FDP), and the introduction of a Single National Formulary. Furthermore, the Medicines and Healthcare products Regulatory Agency (MHRA) is expected to finalize the legislative framework for its future medical device regime during 2026, creating a temporary state of "regulatory duality" where manufacturers must navigate existing UK Conformity Assessment (UKCA) requirements while preparing for international recognition and reliance pathways.
This report provides an analysis of the primary challenges facing HealthTech and MedTech entities, weaving together regulatory, financial, digital and operational data to illustrate the market's trajectory.
The Regulatory Labyrinth: Transitioning to the Future Regime
By 2026, the Medicines and Healthcare products Regulatory Agency will have introduced the primary legislative framework for the future regulation of medical devices in Great Britain. This reform is designed to balance the need for patient safety with the government’s ambition to make the United Kingdom a global leader in life sciences innovation. However, for manufacturers, the primary challenge in 2026 will be navigating the dual-track system of UKCA marking and the newly operationalised international recognition routes.
The Mechanics of International Recognition and Reliance
The MHRA’s Statement of Policy Intent on International Recognition, updated in late 2025, sets the stage for a paradigm shift in how devices gain market access. Manufacturers who have already secured approvals from Comparable Regulator Countries (CRCs), such as the U.S. FDA, or regulators in Canada and Australia, will have access to streamlined pathways. While this is intended to reduce duplicated costs and accelerate patient access, the 2026 transition period introduces significant administrative complexity.
Regulatory Pathway Feature | UKCA Marking (Domestic Route) | International Recognition/Reliance Route |
Primary Authority | UK Approved Bodies / MHRA | CRC (e.g., FDA, Health Canada) + MHRA Oversight |
Eligibility | All devices seeking GB market access | Devices approved by Comparable Regulator Countries |
Labeling Requirements | UK Responsible Person name/address | UK Responsible Person + English language |
2026 Status | Mandatory for new devices without CE transition | Legislative framework introduced; testing underway |
Operational Date | Currently Active | Reliance routes active from 2027 |
Manufacturers must manage the requirement for a "certificate of international recognition," which grants market access but does not technically replace the UKCA marking for all categories. The eligibility criteria are stringent: devices must maintain the same design, manufacturing process, and intended purpose as approved in the CRC, and must align with UK-specific technical standards such as electrical safety and measurement units. This requires a high degree of version control in global manufacturing chains to ensure that the "GB version" of a device does not diverge from its international counterpart in a way that invalidates recognition.
A key challenge is the timing of these reforms. While the legislative framework is introduced in 2026, the reliance routes, which allow the MHRA to rely on regulatory decisions from the U.S. FDA under frameworks such as 510(k), De Novo, and Premarket Approval (PMA), are not expected to be fully operational until 2027. This creates a "readiness gap" in 2026 where companies must decide whether to invest in the current UKCA process or wait for the streamlined international route, risking a delay in market entry.
Post-Market Surveillance (PMS) and Vigilance Escalation
A critical challenge for HealthTech firms in 2026 is the full implementation of the new Post-Market Surveillance (PMS) regime, which came into force in June 2025. The UK’s requirements now exceed those of the European Union, positioning the MHRA as a more demanding regulator in the post-market phase.
Companies must adapt to a significantly compressed reporting window: serious incidents must be reported within 15 days, down from the previous 30-day standard.
Incident Type | Reporting Deadline (Days) | Basis of Requirement |
Serious Public Health Threat | 2 Calendar Days | UK MDR 2002 Amendment |
Death or Serious Deterioration | 10 Calendar Days | UK MDR 2002 Amendment |
Serious Incident (General) | 15 Calendar Days | Part 4A Regulations |
Field Safety Corrective Action | Immediate | Vigilance Guidance |
The introduction of Part 4A to the UK Medical Devices Regulations 2002 requires manufacturers to develop robust internal systems for drafting Field Safety Notices (FSNs) and Periodic Safety Update Reports (PSURs). Meeting these standards will generally satisfy EU obligations, providing a strategic advantage for companies navigating both landscapes, but the immediate operational cost is high.
Furthermore, the MHRA is reforming its PMS fees and introducing a new annual fee structure starting in April 2026, adding a recurring financial burden to market participation.
The Financial Reset: Individual Breakeven and Productivity Mandates
The fiscal environment for the NHS in the 2026/27 financial year will be characterised by a "return to basics" regarding financial discipline. For the past several years, the NHS operated under a "system breakeven" duty, where the aggregate performance of an ICB and its constituent trusts was measured. From 1 April 2026, this duty is abolished in favor of an "individual breakeven" requirement.
The End of Deficit Support and the Efficiency Factor
This shift has profound implications for MedTech sales cycles. Under the new operating model, every ICB and NHS Trust is required to maintain a breakeven financial position as an individual statutory body. Deficit support funding, which previously cushioned underperforming organisations, will be removed.
Consequently, purchasers will have zero tolerance for technologies that do not provide an immediate and measurable return on investment.
To support this transition, the 2026/27 NHS Payment Scheme (NHSPS) maintains a 2% general efficiency factor. Suppliers are no longer selling just a clinical solution; they are selling a productivity gain.
Any technology that does not demonstrably release clinical time or reduce the cost per episode of care will likely fail the procurement hurdle.
The finance business rules from 2026/27 explicitly state that organisations in deficit will face a "financial override" in their oversight segmentation, leading to increased central intervention and reduced local autonomy.
Cost of Commissioning and Allocation Convergence
The financial pressure extends to the administrative level of Integrated Care Boards. The cost of commissioning limit, which covers ICB running costs, will rise from £19 to £19.40 per head in 2026/27 to reflect pay-related cost pressures. This increase is expected to release approximately £1 billion of savings through reduced bureaucracy, but it also means that ICBs have less headcount to manage complex, innovative procurement projects.
Financial Year | ICB Commissioning Limit (£ per head) | Efficiency/Saving Expectation |
2025/26 | £19.00 | Baseline |
2026/27 | £19.40 | £1bn savings release |
2027/28 | £19.80 | Indicative growth |
2028/29 | £20.21 | Target distribution |
The movement toward "fair share" distribution (convergence) means that some ICBs will see their budgets decrease in real terms to fund under-resourced regions. For HealthTech companies, this means the geographic "sweet spot" for high-value sales may shift from historically wealthy trusts to those receiving "convergence uplifts."
Procurement Transformation: Value-Based and Outcome-Oriented Models
The 2026 procurement landscape will be defined by the national rollout of Value-Based Procurement (VBP) guidance for medical devices and digital products. For decades, NHS procurement was often criticised for a "sticking plaster" mentality that prioritised the lowest unit price over long-term outcomes. The new Department of Health and Social Care (DHSC) guidelines, piloted by 13 trusts in 2025, will be standard by early 2026.
The Five Domains of Value and Scoring Caps
The VBP framework requires procurement decisions to be based on a holistic assessment across five domains: social value, efficiency, patient and staff outcomes, supply chain resilience, and purpose. This marks a watershed moment for MedTech firms, as whole-life cost is capped at 40% of the total procurement score, while at least 60% of the scoring must relate to these value domains.
VBP Domain | Primary Evaluation Criteria | Impact on Vendors |
Social Value | Carbon reduction, modern slavery risk (min 10% weighting) | Mandatory Net Zero commitment |
Efficiency | Patient pathway simplification, productivity metrics | Must prove "time released" to clinicians |
Outcomes | Long-term patient health, staff safety, health equity | Requirement for clinical/RWE data |
Resilience | Supply chain transparency, domestic buffer stocks | Audit of manufacturing origins |
Purpose | Interoperability, ease of use, alignment with 10YHP | Integration with FDP/EPR is critical |
This framework highlights the importance of collaboration between suppliers, clinical teams, and procurement professionals. Bidders are encouraged to provide evidence that supports their claims, including quantitative data, modelling and independent validation. The guidance also advises buyers to ensure proportionality in their tender requirements to support the participation of small and medium-sized enterprises (SMEs) within the sector.
The Role of the Central Commercial Function (CCF)
The NHS Central Commercial Function is driving a strategy of framework consolidation. Suppliers are expected to "accept operating models and commercial standards," which include making full use of consolidated supplier frameworks agreed through NHS Supply Chain.
The procurement calendar for 2026 includes several major framework renewals, such as Diagnostic Equipment and Services (expiring July 2026) and Medical Technology Cardiology and Vascular Solutions (renewal starting April 2026).
Framework Category | Tender Start Date | Contract Expiry Date |
Diagnostic Equipment & Services | 06/01/2026 | 24/07/2026 |
Medical Technology (Audiological) | 25/02/2026 | 27/03/2027 |
Cardiology & Vascular Solutions | 17/04/2026 | 27/02/2027 |
Operating Theatres & Accessories | Extension Option | 11/04/2026 |
Suppliers who are not on these centralised frameworks will find it increasingly difficult to sell directly to trusts, as the 2025/26 priorities and operational planning guidance mandates that systems "exhaust all realistic in-year productivity and efficiency opportunities" by using national contracts.
The Digital Infrastructure: FDP, Interoperability and the AI Frontier
In 2026, digital capabilities are no longer a value-add; they are the "price of entry". The implementation of the Federated Data Platform (FDP) and the mandate for 100% Electronic Patient Record (EPR) coverage by April 2026 create a rigid technological architecture that all new HealthTech solutions must inhabit.
Federated Data Platform (FDP) Integration
The FDP, supplied by Palantir and its consortium (Accenture, PWC, NECS), is the central nervous system of the 2026 NHS. For MedTech companies, the challenge is twofold: technical integration and the protection of intellectual property. The NHS retains the intellectual property for NHS-funded services, ensuring that capabilities developed are retained within the service.
The FDP operates at three levels:
National Instance: For NHS England service planning.
ICB Instance: For population health management and service purchasing.
Trust Instance: For waiting list management, theatre scheduling, and patient flow.
By 2026, vendors must demonstrate their ability to feed data into these instances. A separate evaluation partner contract worth £600,000, running from February 2026 to 2029, will specifically assess whether the FDP is achieving its objectives and delivering value for money. Vendors who cannot facilitate the FDP's mission to "eliminate data siloes" will be viewed as legacy debt.
Interoperability and the FHIR Mandate
The NHS has established the Digital Technology Assessment Criteria (DTAC) as the national baseline for digital tools. In 2026, adherence to the DTAC's interoperability domain, which mandates the use of Fast Healthcare Interoperability Resources (FHIR) and HL7 standards, will be strictly enforced for any technology entering the NHS.
DTAC Assessment Domain | Technical Requirement for 2026 | Impact on Product Development |
Clinical Safety | Compliance with DCB0129 and Hazard Logs | Mandatory Clinical Safety Officer |
Data Protection | GDPR-by-design and DPIA completion | Mandatory DPO and ICO registration |
Technical Security | Cyber Essentials and Penetration Testing | Multi-factor authentication required |
Interoperability | FHIR APIs and SNOMED CT mapping | No proprietary data silos permitted |
Accessibility | WCAG 2.1 compliance | Benchmark for patient-facing tools |
The "analogue to digital" shift also includes the decommissioning of paper-based processes. Trusts are expected to "re-engineer local process and workflow" to ensure all colleagues are using digital systems and that paper is removed. For companies selling hardware that still relies on printed reports or manual data entry, the 2026 market will be increasingly hostile.
The Rise of AI and the "Confidence Crisis"
The NHS plans to be the most AI-enabled health system globally, with a dedicated AI Strategic Roadmap and a National Commission to publish a regulatory rule book in 2026. While 98% of clinicians believe AI could streamline tasks, fewer than half of organizations are actively deploying it due to a "readiness gap".
The primary barrier is "clinician burnout," often exacerbated by outdated technology and administrative load. In 2026, AI tools that act as a "confidence-building assistant", such as ambient voice technology (AVT) for clinical note-taking and AI-driven decision support for radiology or dermatology, will see the most aggressive capital flows.However, vendors must prove that their AI reduces the "cognitive load" and diagnostic uncertainty rather than adding a new layer of complexity.
The Net Zero Mandate: ESG as a Commercial Necessity
By 2026, the NHS Net Zero roadmap reaches a critical inflection point. What were previously weighted goals will become hard conditions of participation in the NHS supply chain. From April 2026, the requirement for a Net Zero Commitment (NZC) will be extended to all new procurements, including those below the relevant Public Contracts Regulations threshold.
Carbon Reduction Plans (CRP) and Scope 3 Expansion
For all contracts above £5 million per annum, the NHS already requires a full Carbon Reduction Plan. From 2026, the reporting boundary must expand significantly to include global emissions across the value chain, even if the UK operation is the primary contractor.
Emission Scope | Requirement for 2026 Compliance | 2027/28 Outlook |
Scope 1 & 2 | Full reporting of direct and indirect energy | Baseline and current emissions |
Scope 3 (Subset) | 5 Categories (Transport, Waste, Commuting) | Full global emissions reporting |
Product Level | Learning/Preparatory phase | Mandatory foot printing by 2028 |
Net Zero Target | Public commitment to 2050 (pref 2045) | Evidence of ongoing reduction |
The five mandatory Scope 3 categories for 2026 include upstream and downstream transportation and distribution, waste generated in operations, business travel, and employee commuting. For many suppliers, this requires the implementation of new data collection systems and engagement with upstream partners to obtain accurate emissions data.
The "Evergreen" Assessment and Social Value Playbook
The NHS Social Value Playbook, published in June 2025, encourages buyers to consider social value at every stage of the contract lifecycle.The Social Value Model, updated in March 2025 and mandatory from October 2025, will be the standard by which all 2026 bids are judged.
Suppliers that demonstrate "sophisticated responses" on social value will benefit from the mandatory 10% weighting, which could determine the award decision in cases of close-run bids.
Operational Performance: Waiting Lists, Targets and Capacity
HealthTech and MedTech companies must align their products with the NHS's stretching operational targets for 2026/27. The core milestone for the government is to return to the 92% standard for the 18-week referral-to-treatment (RTT) target by the end of 2029.
RTT and Diagnostic Targets for 2026/27
In the 2026/27 financial year, every trust is expected to deliver a minimum 7% improvement in 18-week performance or reach a minimum of 65% RTT performance. To achieve this, the NHS is aggressively scaling Advice & Guidance (A&G) via the e-Referral Service (e-RS) by July 2026 and expanding "straight-to-test" or one-stop clinics in the ten largest specialties.
Performance Standard | 2026/27 Interim Target | 2028/29 Constitutional Goal |
Elective Care (RTT) | 65-70% waiting < 18 weeks | 92% waiting < 18 weeks |
Diagnostics (DM01) | < 14% waiting > 6 weeks | < 1% waiting > 6 weeks |
A&E Waiting Times | 82% seen < 4 hours | 85% seen < 4 hours |
Cancer (62-day) | 80% start treatment | 85% start treatment |
GP Access | 90% same-day urgent care | Standardised across UK |
Technologies that facilitate "Patient Initiated Follow-Up" (PIFU), remote consultations, and digital monitoring are central to this strategy. Trusts are explicitly instructed to "minimise unwarranted diagnostic referrals" to create capacity for tests that truly benefit patient outcomes. This is a challenge for high-volume diagnostic kit manufacturers but an opportunity for AI-driven triage and clinical decision support tools.
The Neighbourhood Health Model and Community Shift
The shift from "treatment to prevention" involves launching the online NHS Health Check and expanding access to NICE-approved weight-loss treatments to approximately 220,000 adults by 2028. In 2026, the NHS will prioritise the "Neighbourhood Health Model," which establishes multidisciplinary teams in the community to reduce reliance on hospital outpatients.
For MedTech, this means the growth of the market is in "hospital-at-home" and "virtual ward" services. The NHS has already created 12,000 virtual ward beds, which are expected to deliver savings of up to 100 kilotonnes of CO2 equivalent (ktCO2e) while freeing up physical hospital capacity.
Structural Reorganisation: ICB Mergers and the Disruption of Sales Cycles
In addition to regulatory and financial changes, the physical structure of the NHS is reorganizing. On 1 April 2026, a series of ICB mergers will take effect, legally closing 12 existing ICB codes and creating 6 new, larger bodies.
The Impact of 12 Legal Closures
For a MedTech sales team, this reorganization is a moment of extreme disruption. Existing relationships with procurement leads and clinical commissioners may be severed or reorganized overnight. Twelve ICB codes will be legally closed on 31 March 2026, remaining operationally active for only six months to allow for system migrations.
Region | ICB Mergers Effective 1 April 2026 | New Body Name |
London | North Central + North West London | West and North London ICB |
East of England | Norfolk & Waveney + Suffolk & North East Essex | Norfolk and Suffolk ICB |
East of England | Mid & South Essex + North East/West Essex areas | Essex ICB |
East of England | Cambridgeshire + Bedfordshire + Hertfordshire | Central East ICB |
South East | Surrey + Sussex + Frimley Wards | Surrey and Sussex ICB |
South East | Bucks/Oxon/Berks + East Berks (Frimley) | Thames Valley ICB |
These new, larger ICBs are expected to function on reduced costs from 1 April 2026, supporting the delivery of their 50% cost reductions. This centralised model means that sales cycles will likely lengthen as decision-making moves further away from individual clinical units and into regional "strategic authorities." Suppliers will need to re-assess the impact of data changes on national and local systems, as new ICB codes will impact financial transactions and patient referrals.
Clinical Evidence: The NICE Early Value Assessment (EVA) and Real-World Evidence (RWE)
The threshold for clinical evidence is shifting in 2026. The National Institute for Health and Care Excellence is moving toward a "lifecycle approach" to HealthTech evaluation, most notably through the Early Value Assessment (EVA) program.
Managed Access and Resolvable Uncertainty
The EVA allows promising technologies, particularly digital ones that address unmet needs, to enter the NHS early while further evidence is generated. However, this "early access" is contingent upon the technology being potentially cost-effective but having "resolvable uncertainty" about its value.
After a specified period of collecting real-world data (RWD), the technology is reassessed through the Technology Appraisal Programme. For vendors, this means that the "sale" is never final; they must actively participate in evidence generation throughout the product's life cycle in the NHS. This requires a sophisticated internal capability for RWE generation, adhering to the NICE RWE Framework, which aims to use RWD to resolve gaps in knowledge and drive forward access to innovations.
Cost-Effectiveness Thresholds and Trade Policy
From April 2026, NICE will increase the cost level at which it deems a medicine or technology to be cost-effective to between £25,000 and £35,000 per extra year of good health. This change is part of the UK-US pharmaceutical trade deal announced in December 2025. While this ostensibly makes it easier for expensive technologies to be approved, the concurrent proposal to allow the Secretary of State to set the threshold introduces political volatility into the HTA process.
Standard Metric | Traditional Threshold | Proposed 2026 Threshold |
Cost per QALY | £20,000 - £30,000 | £25,000 - £35,000 |
Appraisal Recommendation | 84% Positive | TBD based on new limits |
Approval Speed | Baseline | 26% Improvement (Target) |
The Single National Formulary: Standardising Access
The introduction of a Single National Formulary (SNF) by the end of 2027 represents a significant development for both pharmaceutical and MedTech markets. The SNF will replace local lists of approved medicines with a national list, aiming to remove the "postcode lottery" of access.
Sequencing and Oversight
A new Formulary Oversight Board will be responsible for sequencing products based on clinical and cost-effectiveness, supported by NICE and working with industry. For vendors, the 2026 challenge is to ensure their products are prioritised by this board. The initial focus will be on high-spend areas, including pathways for wet AMD (age-related macular degeneration) and cardiovascular medications.
While clinicians will retain clinical autonomy, they will be "encouraged" to use products ranked highly in the SNF.This centralisation could disempower local clinicians who previously had a mechanism to request specific treatments. From April 2026, NICE's technology appraisal process, which includes mandated funding by the NHS, will be expanded to cover some devices, diagnostics, and digital products, offering them the same funding guarantee as medicines.
Strategic Synthesis: The Challenges of 2026
The HealthTech and MedTech companies that will succeed in the NHS in 2026 are those that can solve the "trilemma" of delivering clinical outcomes that are cost-neutral, meeting strict digital interoperability standards, and maintaining a verifiable path to carbon neutrality. The challenges are formidable:
Regulatory Burden: Navigating the transition to UKCA while preparing for the 2027 operationalization of reliance routes for FDA-cleared devices.
Fiscal Rigidity: Operating in an environment where every ICB and trust has an individual breakeven duty and deficit support funding has been removed.
Procurement Maturity: Adapting to a value-based model where product cost is capped at 40% of the score and social value is a 10% hurdle.
Digital Integration: Ensuring products are FDP-integrated and FHIR-compliant to avoid being excluded as "analogue" or "legacy" technology.
Environmental Accountability: Providing granular carbon footprint data and Net Zero commitments as a condition of contract award.
Structural Disruption: Managing the impact of 12 ICB legal closures and the resulting reorganization of clinical and commercial leadership.
The 2026 NHS is not a market for "vendors" but for "transformation partners". Success will require an enterprise-wide realignment, from R&D to sales, to the new "digital-by-default," "value-over-volume," and "net-zero" reality of the NHS. Companies must move away from transactional selling and toward a model of shared risk and long-term partnership, demonstrating how their technology helps the NHS achieve its 2% annual productivity ambition while dramatically reducing waiting times for patients.
Nelson Advisors > European MedTech and HealthTech Investment Banking
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